Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - Dollar flat as U.S. holiday keeps trade thin

Published 29/05/2017, 15:53
Updated 29/05/2017, 16:01
© Reuters.  Dollar flat as U.S. holiday keeps trade thin

© Reuters. Dollar flat as U.S. holiday keeps trade thin

Investing.com - The dollar was little changed against a basket of the other major currencies on Monday, holding above last week’s six-and-a-half month lows with U.S. financial markets closed for the Memorial Day holiday.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was almost unchanged at 97.37 by 10.47 ET, holding above last week's low of 96.79, its weakest level since November 9.

Traders had a subdued start to the week with markets in the U.S, the UK and China closed for holidays.

Investors were looking ahead to Friday’s U.S. employment report, which was expected to show that conditions in the labor market remain solid.

A strong U.S. jobs report would cement expectations for a rate hike by the Federal Reserve at its next meeting in June.

Data on Friday showed that the U.S. economy slowed less than initially thought in the first three months of the year. Gross domestic product grew at an annual rate of 1.2% in the three months to March, the Commerce Department said, up from an initial estimate of 0.7%.

It was still the weakest expansion since the first quarter of 2016, but economists think growth is likely to rebound sharply in the current quarter.

The dollar was steady against the safe haven yen, with USD/JPY at 111.31.

The traditional safe haven yen showed little reaction after North Korea fired what appeared to be a short-range ballistic missile early on Monday.

Investors remained in a cautious mood amid ongoing political concerns surrounding the Trump administration.

President Donald Trump attacked the media and dismissed White House leaks as "fake news" on Sunday, following reports that Jared Kushner, his son-in-law and senior aide, sought to set up secret “back channel” communications with Russia before Trump took office.

The euro was a touch lower, with EUR/USD dipping to 1.1169 after setting a six-and-a-half month high of 1.1267 last week.

European Central Bank President Mario Draghi said on Monday that inflation in the euro area remains subdued and still requires substantial stimulus, tempering expectations ahead of the banks upcoming meeting on June 8.

Recent signs of strength in the euro zone economy along with fading political risk have fueled speculation that the ECB could scale back its massive monetary stimulus program.

Meanwhile, sterling pushed higher, with GBP/USD adding 0.27% to 1.2833, recovering from the three-week low of 1.2774 hit on Friday.

Sterling weakened after an opinion poll showing that the Labor Party narrowed the gap on the ruling Conservative Party ahead of upcoming elections, adding to political risks surrounding Brexit.

Investors had been confident that British Prime Minister Theresa May would secure a strong win in the election, strengthening her hand in Brexit negotiations and allowing her to ignore lawmakers pushing for a hard Brexit.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.